To celebrate his landslide win in WA’s state election, WA’s most popular Premier in history is today using his new found powers to provide our State’s economic engine with a long overdue reward…
Effective today, the two most inefficient, disincentivising (and in this accountant’s mind just silly) taxes known to man will be abolished!
Most Sandgropers likely won’t even know what these taxes are or that they even exist.
If you have never been the owner of a growing business, there is every chance you will have never encountered them.
And that is why no government has ever bothered to fix them before now.
They simply don’t move the needle when it comes to votes.
But this election votes were in abundant supply for our favourite M&M, and so he is using this unprecedented opportunity to fundamentally improve the environment for our homegrown entrepreneurs and employers.
Can you guess what they are?
Ok, the first one is easy…
The silliest tax of them all.
A penalty for growing your business, for employing more West Aussies and for paying them more.
That’s right, grow your business to a point where you start to hit a critical size, and the State Government currently adds an extra 5.5% to your wages bill in the form of an additional, largely unknown and oft overlooked tax.
For those non-business owners out there you may think “who cares” business can afford it. But what this really means is that by working hard and helping your place of employment grow, you could actually be reducing your employer’s ability to employ more people, and to pay you more. Because the additional cost imposed by Payroll Tax reduces their ability to take on that next hire or to give you that next pay rise, instead once the business starts paying Payroll Tax, every time they consider giving you a pay rise, they budget for the first 5.5% to go to the WA Government, before giving it to you!
It also creates an unnatural and unwanted incentive for business owners to shelve their growth ambitions and instead to maintain the status quo, just under the taxable threshold.
But as of today, the madness (finally) ends.
I say finally, because as few will remember, and most State politicians want us to forget, Payroll Tax was to be abolished as part of the deal done to introduce GST way back at the turn of the century (21 years ago). But every subsequent State Government has reneged on that commitment, until now.
Ok, so what is the other one?
The lawyers out there will probably know.
As will anyone who has purchased a business only to discover the hard way it will cost much more than the advertised sticker price.
That’s right, its…
Transfer Duty on the Sale of a Business
In some respects this is even worse than Payroll Tax, because we are one of the few states left that still impose this tax. Most others have removed this barrier and incentivised their businesses to expand and grow and to employ more of their citizens.
A transfer duty on the purchase of a business is a huge disincentive and financial barrier for West Aussie to buy and develop businesses and therefore to employ locals and contribute to enhancing our economy and our standard of living.
Yes, we pay Transfer Duty (previously referred to as Stamp Duty) on the purchase of a property. And many will argue over its merits but we have to face facts, the State Government needs to raise funds somehow, and taxing property transactions is a long recognised, broadly based method of doing so.
But applying the same tax, actually generally the rates are a bit higher, to the sale of businesses makes much less sense as it acts as a substantial barrier to entering the world of business and contributing to the employment of so many.
So the great news is that WA is finally catching up with our fellow States throughout the country and removing this silly tax that has been holding us back for so long.
Brave but Logical Decisions
Mr McGown has taken a number of brave but logical decisions over recent times.
Even when small, vocal groups (who perhaps struggled to see the bigger picture, and the greater good) have voiced their concerns, he has remained strong, and stuck to what he knew was right and was in the best interests of ALL West Aussies.
We all know there is no other place in the world we would want to have lived over the past 12 months than WA, and that is very much thanks to Mark Mac.
And as a result he has been rewarded at the ballot boxes.
So now with the vaccine rollout in full swing and as the world (hopefully) begins to work its way out of the pandemic, WA is perfectly positioned to allow our local businesses to grow and flourish and employ more hard working individuals, benefiting every one of us.
We truly live in one of the best places in the world.
So well done (in advance) Mark McGowan.
Happy 1st of the (fourth) month! 😉
I hope you all enjoyed a few moments basking in the illusion our state taxes have finally been rationalised to remove disincentivising imposts that inhibit our business owners, risk takers, entrepreneurs and employers.
But unfortunately, in case you hadn’t noticed, the date today is April 1st, otherwise known as April Fools Day. So this article is not a true report, instead it is what I would like to be writing. I have no doubt there are many pressing issues on Mr McGowan’s mind right now, and he is working through how best to benefit WA from his election success. But here’s hoping he can find the time to finally fulfil the State Governments commitment to abolish Payroll Tax and to remove Transfer Duty on the sale of businesses and bring us in line with the rest of the country.
Pinch and a punch for the first of the month. Don’t get fooled 😉
Have a great day